On Friday, Moody's downgraded Motorola's (NYSE:MOT) credit rating, citing concerns over revenue growth and stiff competition in its cell-phone unit as deterrents to substantial profitability. Does Moody's have a point?

In response, the world's second-largest cell-phone maker decided to report earnings this morning rather than on Tuesday. The company delivered a modest rebuttal, reporting third-quarter operating cash flow of $1.1 billion, marking its sixth-strongest quarter ever. Meanwhile, net income grew 4.5% to $115 million, or $0.05 per share, on solid sales growth of 5% to $6.8 billion.

Its personal communications unit, however, gave a mixed bag. On the one hand, the unit showed promise, as sales rose 8% to $2.9 billion while orders increased a hefty 44% to $3.7 billion. On the other hand, it's apparent that competition severely affected profitability.

While handset shipments grew 19% to 20.2 million, operating earnings at the unit declined 27% to $165 million. The huge decline in operating margins is a reflection of stiff competition in Asia, where the company has lost market share and suffers from heavy pricing pressure.

Conspicuously absent from discussion was any new information on the impending spin-off of its semiconductor unit. Notably, its potential IPO would generate cash that would help the company further reduce its $7 billion debt, thus improving Motorola's "creditworthiness."

But even with the debt reduction, Moody's might have a point with Motorola's heavy competition in Asia. Luckily for us, we won't have to wait long to get some answers: No. 1 Nokia (NYSE:NOK) should offer a little more insight when it reports its results on Thursday.

Jeff Hwang can be reached at JHwang@fool.com.